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Financial vulnerability of households: evidence for the Basque Country and the rest of Spain

Author

Listed:
  • Alfonso Arellano

    (BBVA Research and Complutense University of Madrid)

  • Noelia Cámara

    (BBVA Research)

Abstract

One of the consequences of the COVID-19 pandemic has been the loss of the main source of income for many households due to the lockdown of the workforce and the suspension of part of the economic activity. The aim of this paper is to analyze the importance of financial literacy and personal experiences with the financial system on financial vulnerability. We show evidence for households in the Basque Country and in comparison with the rest of Spain. Our research shows that controlling for multiple socio-demographic factors, households with lower financial literacy and who had some disagreement with the financial system are more likely to be very vulnerable. These effects are larger in the Basque Country than in the rest of Spain.

Suggested Citation

  • Alfonso Arellano & Noelia Cámara, 2021. "Financial vulnerability of households: evidence for the Basque Country and the rest of Spain," EKONOMIAZ. Revista vasca de Economía, Gobierno Vasco / Eusko Jaurlaritza / Basque Government, vol. 100(02), pages 94-119.
    • Handle: RePEc:ekz:ekonoz:2021206
    as

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    References listed on IDEAS

    as
    1. van Rooij, Maarten & Lusardi, Annamaria & Alessie, Rob, 2011. "Financial literacy and stock market participation," Journal of Financial Economics, Elsevier, vol. 101(2), pages 449-472, August.
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    3. Ulrike Malmendier & Stefan Nagel, 2011. "Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 373-416.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    experience effect; financial literacy; financial vulnerability; households;
    All these keywords.

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

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